Get started
Work

Performance-Based Pay and Employees’ Commitment in Bottled Water Companies in Ondo State

Year: 2025
Type: article
Study design: Observational Study
Abstract: This study investigates the effect of performance-based pay (PBP) on employee commitment in the bottled water manufacturing sector in Ondo State, Nigeria. Recognizing that compensation systems significantly shape employee behavior, the study disaggregates PBP into three schemes—individual performance bonuses, merit pay, and piece-rate pay—to assess their distinct influences on affective, normative, and continuance commitment. A descriptive survey design was employed using a structured questionnaire administered to 246 employees selected through a multistage sampling technique from 24 bottled water firms. Descriptive statistics, Pearson correlation, and multiple regression analyses were conducted using SPSS 25. Findings revealed that all three types of PBP positively and significantly influence employee commitment, with individual performance bonuses emerging as the strongest predictor, followed by merit pay and then piece-rate systems. The study also found that while performance bonuses and merit pay primarily enhance affective and normative commitment, piece-rate pay is more strongly associated with continuance commitment, often driven by economic necessity rather than emotional attachment. These results are largely consistent with prior research but offer new insights by providing a sector-specific, contextualized, and differentiated analysis of PBP within a developing economy. The findings contribute to theory by reaffirming key motivational frameworks and extend prior literature by distinguishing between the effects of different PBP forms. For practice, the study recommends a targeted compensation strategy that balances financial incentives with transparent performance evaluation to cultivate sustained employee commitment. Limitations and future research directions are discussed to guide broader application and further inquiry.
DOI: 10.47191/jefms/v8-i9-22
Language: English
Open Access status: diamond
OpenAlex ID: W4414376397
FWCI:
Cites:
Cited by:
Related to: